Senators announced a bipartisan deal to tighten the reins on mortgage giants Fannie Mae and Freddie Mac on Monday, paving the way for enactment of legislation that has eluded lawmakers for nearly a decade.

The legislation, expected to pass through committee on Tuesday, would create a new, stronger regulator for the two mortgage giants, which for years have spent their huge profits to fend off such scrutiny.

“I think the key factor in why we’re here is that, when you look at the housing market, it’s clear that Fannie and Freddie play a key role — but if they’re not financially sound and properly regulated then the whole system is at risk,” said Mike House, the executive director of FM Policy Focus, a coalition representing many financial firms that compete with Fannie and Freddie.

Only a few years ago, the debate over strengthening oversight of Fannie and Freddie, also known as the government-sponsored enterprises (GSEs), hinged on whether they should exist at all.

Former Federal Reserve Chairman Alan Greenspan told Congress they should be privatized, warning that the two for-profit firms’ massive portfolios — which today total more than $1.4 trillion worth of loans and securities — posed a huge risk to the financial system.

Former Rep. Richard Baker (D-La.) pushed a bill to sever each firm’s $2.25 billion line of credit with the U.S. Treasury — an arrangement that fuels the widely held belief on Wall Street that the government would bail out the companies should they run into trouble.

Today there’s little talk of such remedies. Fannie and Freddie, congressional-chartered entities created to spur homeownership, seem to have quieted their harshest critics by coming to the rescue of the housing market this past year as investors have fled mortgage assets.

But by filling this void, the companies have badly weakened their own financial condition, posting enormous losses for the first quarter that have heightened worries on Capitol Hill that they will fail.

In an interview last week, Sen. Richard Shelby (Ala.), the top Republican on the Banking Committee, compared Bear Stearns and other global banks that have been walloped by the mortgage mess to “little grocery stores” compared with the impact a Fannie or Freddie blowup would have on the financial system.

The enterprises, which buy mortgages from the lenders that originate them, now account for more than 80 percent of all mortgages sold to investors. That is more than twice their market share in 2006.

In March, Fannie and Freddie had over $5 trillion in debts and other obligations outstanding — which is roughly equal to the publicly held debt of the U.S. government. Because of their implied government backing, the enterprises have continued to borrow at near-Treasury rates despite the credit crunch.

Earlier this year, Shelby and Banking Chairman Chris Dodd (D-Conn.) were seen as so far apart on GSE reform that the odds seemed stacked against a bill passing this year — despite House approval last year of GSE reform legislation backed by the White House.

On Monday, the senators said they had reached a deal to create a new regulator to oversee Fannie, Freddie and the 12 Federal Home Loan Banks.

The legislation would create a GSE regulator that would have yet-to-be-specified powers to raise Fannie’s and Freddie’s capital levels and to limit their portfolios. Crucially, the regulator wouldn’t derive its budget through appropriations — a process subject to lobbying by the GSEs — but through fees levied on the enterprises.

The legislation will likely toughen their requirements to finance homeownership among low-income people and is also likely to include a trust fund — drawn from a portion of the GSEs’ profits — to finance the construction of new affordable housing.

The GSEs have endured heavy criticism for years that they’ve shirked their congressionally mandated duties to reduce mortgage costs in poorer communities in favor of more lucrative investments.

“We like the GSEs. We just want them to do what their charter told them to do,” said Judith A.

Kennedy, the president of the National Association of Affordable Housing Lenders, which aims to increase the flow of private capital to low-income communities.

A bipartisan deal on such legislation is no small feat, given the firms’ lobbying clout.

The enterprises are among the top 20 biggest spenders on federal lobbying over the past 10 years, according to the Center for Responsive Politics. From 1998 through the first quarter of 2008, Freddie Mac paid $92.6 million in fees to lobbyists — more than Boeing Co., Lockheed Martin and ExxonMobil spent.  

Fannie Mae has spent $78 million on federal lobbying during that period.